Asian stocks may follow gains on Wall Street

MomingZhou

SAN FRANCISCO (MarketWatch) -- Asian stocks are expected to pace gains on Wall Street Wednesday after U.S. economic data came in largely as expected and major car companies mostly reported strong August sales.

September futures for the Nikkei 225 Index (1804610) were at 16,530 on the Chicago Mercantile Exchange at last check, up from Tuesday's close of 16,400 on the Osaka Stock Exchange and 16,335 on the Singapore Exchange, indicating a strong opening for their underlying index on Wednesday.

The Bank of New York Asia ADR Index
16899W12
the benchmark measure gauging American Depositary Receipts of Asian companies, rose 0.8% to 163.55, the highest level since July 31. The Japan ADR Index
16899W27
was up 0.5%.

"Asian equities are likely to open up after the rally in the U.S. markets and as the yen's weaker tone supports export-related industries," said Brown Brothers Harriman analyst Marc Chandler.

A weaker yen boosts the profits of Japanese exporters when converted into their currency. The dollar was up 0.5% against the yen at last check. See Currencies.

U.S. economic data

Earlier Tuesday, the U.S. Institute for Supply Management reported its manufacturing index registered at 52.9% in August, just shy of the consensus of analysts polled by MarketWatch and down from 53.8% in July. See full story.

Also, the Commerce Department reported a 0.4% decline in U.S. construction spending in July. Economists had forecast spending would be flat. See full story.

Putting pessimistic sentiment in the markets, Merrill Lynch cut earnings estimates on 12 of 15 stocks providing staffing and related services. The broker also projected a 65% chance of a U.S. recession. See full story.

Car sales

Nissan Motor Co.
NSAN
(7201), Japan's third largest automaker, said Tuesday that its U.S. sales increased 6% in August compared to the same period in 2006. See full story.

South Korea's Hyundai Motor Co. said U.S. sales rose 1% in August to 45,087 vehicles from 44,635 in the same month last year.

Among U.S. carmakers, the world's No. 1 General Motor Co.
GM, +1.42%
announced a 6.1% advance in light vehicle sales even though analysts were looking for a pullback. See full story.

Ford Motor Co.
F, +0.80%
reported a 14.4% decline, slightly worse than the 13.2% drop analysts had expected, and Chrysler LLC, in its first monthly sales report since separating from DaimlerChrysler, posted a 6% decline, also mostly in line with forecasts.

Tech boom

The technology sector in the U.S. markets got a boost after the Semiconductor Industry Association reported a 2.2% rise in chip sales in July.

Apple Inc.
AAPL, +1.91%
climb 4.4%. Technology research firm iSuppli said the iPhone was the top-selling smart phone in the U.S. during July, accounting for 1.8% of all U.S. mobile-handset sales during the month.

Yahoo Inc.
YHOO, +0.81%
shares rose 5.4% after Bear Stearns named the stock its top pick for the next 12 to 16 months and said Yahoo could potentially be an acquisition target.

Other Asian stocks

China Construction Bank Corp. (939), China's second-largest lender by revenue, said it's getting closer to a sale of shares on the Shanghai Stock Exchange in what could be the largest domestic initial public offering to date. See full story

Sony Corp.'s (6758)
SNE, +0.98%
financial unit said it received approval to list on the Tokyo Stock Exchange on Oct. 11 in an offering worth up to 361 billion yen ($3.1 billion), making it one of Japan's biggest initial public offerings in eight years. See full story

Rio Tinto Plc
RIO, -2.02%
the world's second largest mining company by market value, Tuesday signed fresh agreements with China's SinoSteel Corp. over their long-standing Channar iron ore joint venture.

About 23 of Japan's 109 regional banks and financial institutions have exposure to U.S. subprime mortgages, according to an August poll conducted by the Nikkei News. Japanese banks have collective exposure of 52 billion yen, with losses tallying around 10% of total exposure, according to the Nikkei. See full story.

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